The insidious not-so-badness of technological underemployment, and why more education and better technology won't help

Mass technological unemployment is seen by some as a looming concern, but there are signs we're already living in an era of mass technological underemployment. It's not just an intermediate phase: its politics are toxic, it increases inequality, and it's very difficult to get out of.

Underemployment doesn't necessarily mean working less hours than you'd like, or switching jobs frequently. In fact, it often means working a lot, under psychologically and/or physically unhealthy conditions, for low pay, with few or no protections against abuse and firing, and doing your damndest to keep that job because the alternatives are worse. The United States is a paradigmatic case: unemployment is low, but wage growth has been stagnant for a very long while, and working conditions for large numbers of workers aren't particularly great.

Technology isn't the only culprit — choices in macroeconomic management, fiscal policy, and political philosophy are at least just as important — but it certainly hasn't helped. Yes, computers make anybody who knows how to use them much more productive, from the trucker who can use satellite measurements and map databases to identify their location and figure out an optimal route to the writer using a global information network to gather news and references for a article. But you see the problem: those are extremely useful things, but "using a GPS" and "googling" are also extremely easy things. Most jobs require some form of technological literacy, but when most people got enough of it to fulfill the requirements — thanks in part to decades of single-minded focus in the computer industry — knowing how to use computers makes you more productive, but doesn't get you a better salary. Supply and demand.

More technology obviously won't come to the rescue here; the more advanced our computers become, the easier it is for people to interact with them to get a certain task done (until it's automated and you don't need to interact at all), which makes workers more productive, just not better paid. As most of the new kinds of jobs being created tend to be based on intensive use of technology, they are intrinsically prone to this kind of technological underemployment, and more vulnerable to eventual technological unemployment. The people building those tools are usually safe from this dynamic, but the scalability of mass production, and the even more impressive scalability of software systems, mean that you don't need many people to build those tools and infrastructure. And as we've become more adept at making software easy to use, we've become very good at giving it at best a neutral effect on wages.

Don't think "software engineer," think "underpaid person with an hourly contract working in the local warehouse of a highly advanced global logistics company under the control of a sophisticated software system." There are more of the latter than of the former (and things that used to look like the former have become easy enough to begin to look like the latter...).

More education is equally useless. *Not* to the individual: besides its non-economic significance, your education relative is one of the strongest predictors of your wages. But raising everybody's educational level, just like making everybody's technology easier to use, doesn't raise anybody's wages. By making people more productive, it makes it possible for companies to pay higher wages, but as long as there's more educated-enough people than positions you want to fill, it doesn't make it necessary, so of course (an "of course" contingent on a specific political philosophy) it doesn't happen.

Absent a huge exogenous increase in the demand for labor, or an infinitely more ominous exogenous decrease in its supply, the ongoing dynamic is that technology will keep being improved in power and ease of use, making workers more productive and at the same time giving them less bargaining power, and therefore stalling or reducing their wages and their working conditions.

The developing world faces this problem no less than the developed world, with the added difficulty, but also the ironic advantage, of starting behind them in human, physical, and institutional capital. Investment and integration with the global economy can raise living standards very significantly from that baseline, but eventually hitting the same plateau (and usually at a much lower absolute level).

This isn't just an economic tragedy of missed opportunities, it's an extremely toxic political environment. Mass unemployment isn't politically viable for long — sooner or later, peacefully or not, some action is demanded, which might or might not be rational, humane, or work at all, but which definitely changes the status quo — but mass underemployment of this kind just keeps everybody busy holding on to crappy jobs and trying to learn enough new technology or soft skills or whatever's being talked about this month in order to keep holding to it or even get a promotion to an slightly less crappy job where, not coincidentally, you're likely to end up using less technology (the marketing intern googling something vs the marketing VP having a power breakfast with a large customer). It sustains the idea that people could get a better life if they just studied and worked hard enough, which is true in an individual sense — highly skilled software engineers are very well paid — and absurd as a policy solution — once everybody can do what a highly skilled software engineer can do, then highly skilled software engineers won't be very well paid. Yet it's the kind of absurdity that sounds obvious, and therefore ends up driving politics and hence policy.

The fact that technology and education don't help with this problem doesn't mean we need less of either. There are other problems they help with, and for those problems we need more of both. But we do need to fight back increased underemployment, not to avoid it shifting into mass unemployment, but because there's a good risk of a it becoming widespread and structural, with serious social and political side effects .

There are workable solutions for this , but they lie in the realm of macroeconomics and fiscal policy, which ultimately depend on political philosophy, and that's a different post.

Comments are disabled for this post